Case 6:20-cv-00272-ADA Document 102 Filed 07/21/23 Page 1 of 9
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`VOIP-PAL.COM, INC.,
`Plaintiff,
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`v.
`AMAZON.COM, INC.,
`AMAZON.COM SERVICES LLC, and
`AMAZON WEB SERVICES, INC.,
`Defendants.
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`CIVIL ACTION NO. 6:20-CV-272-ADA
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`REPLY IN SUPPORT OF AMAZON’S OPPOSED
`MOTION TO STAY PENDING THE OUTCOME OF EX PARTE
`REEXAMINATION REJECTING ALL ASSERTED CLAIMS
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`Case 6:20-cv-00272-ADA Document 102 Filed 07/21/23 Page 2 of 9
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`I.
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`II.
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`TABLE OF CONTENTS
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`PAGE
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`INTRODUCTION .......................................................................................................... 1
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`ARGUMENT .................................................................................................................. 1
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`A.
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`B.
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`C.
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`Simplification of Issues for Trial Weighs Heavily in Favor of a Stay................ 1
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`VoIP-Pal Does Not Identify Any “Undue” Prejudice......................................... 3
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`Amazon Filed its Motion to Stay at the Appropriate Time. ............................... 5
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`III.
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`CONCLUSION ............................................................................................................... 5
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`-i-
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`Case 6:20-cv-00272-ADA Document 102 Filed 07/21/23 Page 3 of 9
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`I.
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`INTRODUCTION
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`This case should be stayed pending the outcome of the ex parte reexamination of the ’606
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`patent, where every claim asserted in this case stands rejected. Under such circumstances, this and
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`other courts have consistently stayed cases to avoid wasting Court, jury, and party resources liti-
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`gating claims that will very likely be invalidated (eliminating the need for trial) or amended (re-
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`quiring issues to be re-litigated before trial). In its Opposition, VoIP-Pal fails to refute this show-
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`ing that a stay will simplify issues in the case. VoIP-Pal also fails to identify any undue prejudice
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`recognized by courts in this Circuit. And VoIP-Pal fails to show that Amazon’s motion is un-
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`timely, as Amazon filed the motion shortly after the PTO issued a non-final office action, con-
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`sistent with the guidance of courts in this and other districts, and before a schedule has been entered
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`in this case. With no factors weighing against a stay, Amazon’s motion should be granted.
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`II.
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`ARGUMENT
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`A.
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`Simplification of Issues for Trial Weighs Heavily in Favor of a Stay.
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`A stay in this case would undeniably simplify the issues for trial. This is the “most im-
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`portant” factor in determining whether to grant a stay, and it militates strongly in favor of imposing
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`one in this case. TC Tech. LLC v. T-Mobile USA, Inc., 6:20-cv-00899-ADA, 2021 WL 8083373,
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`at *3 (W.D. Tex. Dec. 7, 2021) (granting motion to stay pending ex parte reexamination). The
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`PTO has already issued an office action rejecting every claim asserted by VoIP-Pal. (Dkt. 100-2
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`at 53.) Staying this litigation will simplify the issues to be tried by either eliminating the need to
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`try the case (if all claims are invalidated) or, at the very least, sparing the Court and the parties the
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`need to litigate claims that almost certainly will not survive in their existing form.
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`VoIP-Pal’s arguments to the contrary are unpersuasive. The cancellation of all asserted
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`claims is not a remote possibility, as VoIP-Pal suggests. (Opp. at 9.) While only 14.2% of ex
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`parte reviews result in the rejection of all claims (id.), that statistic is unpersuasive for at least two
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`Case 6:20-cv-00272-ADA Document 102 Filed 07/21/23 Page 4 of 9
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`reasons. First, asserted claims are significantly more likely to be invalidated where—as here—the
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`PTO has already issued an office action rejecting them. See, e.g., TC Tech., 2021 WL 8083373,
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`at *3 (granting a stay pending ex parte reexamination in part because “[i]nvalidation is especially
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`likely because the examiner has already rejected [all asserted] claims as invalid in an initial office
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`action”). Second, the statistic fails to account for amended claims, which will then necessitate the
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`re-litigation of issues. Re-litigating claims will force the parties to prepare new infringement and
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`invalidity contentions, potentially conduct new fact discovery, and commission new expert testi-
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`mony, none of which will be necessary if the Court imposes a short stay pending the outcome of
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`the ex parte reexamination. (Mot. at 3-4.) Otherwise, the parties will have to litigate the amended
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`claims on an expedited basis to “catch-up” with the proceedings on any unamended claims, or the
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`case will have to be bifurcated with the amended claims being tried later. Neither is an attractive
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`solution, as both would waste judicial resources and time and expense of the parties.
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`The Court can avoid these problems by imposing a short stay pending the outcome of the
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`ex parte reexamination. This common-sense solution is consistent with analogous cases in this
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`Circuit, all of which VoIP-Pal either ignores or fails to distinguish.1 For example, VoIP-Pal does
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`not address this Court’s recent decision in TC Tech to stay that litigation during the pendency of
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`an ex parte reexamination in nearly identical circumstances. TC Tech., 2021 WL 8083373, at *3
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`(staying litigation after rejection of all asserted claims in non-final office action). Likewise, VoIP-
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`Pal contends that Ramot is unpersuasive because it “does not address whether the reexamination
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`1 The cases relied upon by VoIP-Pal are inapposite. Luv N’ Care, Ltd. v. Jackel Int’l Ltd.,
`2:14-cv-00855-JRG, 2015 U.S. Dist. LEXIS 64225, at *7 (E.D. Tex. May 15, 2015) (denying
`plaintiff’s motion to stay pending ex-parte reexamination filed by plaintiff in an attempt to preclude
`defendant from relying on prior art); Roy-G-Biv Corp. v. Fanuc Ltd., 2:07-cv-418 (DF), 2009 WL
`1080854, at *2 (E.D. Tex. Apr. 14, 2009) (denying stay pending ex parte reexaminations, partly
`because it would complicate trial by raising case-specific estoppel and disavowal issues).
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`-2-
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`decision will issue before the trial date.” (Opp. at 10.) But that is wrong. In Ramot, Judge Gilstrap
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`stayed the litigation seven weeks before trial because the simplification of issues was “near cer-
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`tain,” despite the PTO’s final office action being several months away. Ramot at Tel Aviv Univ.
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`Ltd. v. Cisco Sys., Inc., 2:19-cv-00225-JRG, 2021 WL 121154, at *2 (E.D. Tex. Jan. 13, 2021)
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`(granting a stay pending ex parte reexamination, noting the “high probability that the asserted
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`claims will change in scope” given the PTO’s rejection of claims in a non-final office action).2
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`Staying this case until the ex parte reexamination is complete will simplify the issues for
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`trial, given the overwhelming likelihood that some, if not all, of the asserted claims will be inval-
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`idated or amended. This factor—which is the most important—strongly favors a stay.
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`B.
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`VoIP-Pal Does Not Identify Any “Undue” Prejudice.
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`VoIP-Pal’s claims of undue prejudice are also inconsistent with the weight of the authority
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`in this Circuit. As a threshold matter, VoIP-Pal’s concern that it “may not be able to enforce its
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`patent rights for another two years” is not credible. (Opp. at 8.) As noted in Amazon’s Motion,
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`the PTO intends its next office action to be final, indicating that the process is nearly complete.
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`(Mot. at 4.) The ex parte reexamination will likely be resolved in months, not years. Even so,
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`Vehicle IP, LLC v. Wal-Mart Stores, Inc., on which VoIP-Pal relies, held that any prejudice to the
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`non-practicing plaintiff caused by a years-long delay in resolution did not outweigh other factors
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`favoring a stay. 10-cv-00503-SLR, 2010 WL 4823393, at *1, *3 (D. Del. Nov. 22, 2010).
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`Furthermore, VoIP-Pal’s generic, unsubstantiated claim that “damages alone may not fully
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`compensate” it is unpersuasive. (Opp. at 6-7.) VoIP-Pal is not a competitor to Amazon. It does
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`2 VoIP-Pal attempts to distinguish other cases cited by Amazon because they involved inter
`partes review or CBM, but the same considerations—providing a “quick and cost effective alter-
`native[] to litigation”—apply equally to ex parte reexaminations. TC Tech. LLC v. Sprint Corp.,
`16-cv-153-WCB, 2021 WL 4521045, at *3 (D. Del. Oct. 4, 2021) (quoting H. Rep. No. 112-98,
`Part I, at 48 (2011)).
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`-3-
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`not sell any products (let alone products that practice the asserted claims). Any harm caused by a
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`stay can be addressed by a damages award and pre-judgement interest. And though VoIP-Pal does
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`have an interest “in the timely enforcement of its patent rights” (Id. at 6.), that interest is “too
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`generic, standing alone, to defeat a stay motion.” See, e.g., Realtime Data, LLC v. Hewlett Packard
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`Enter. Co., 6:16-cv-00086-RWS (JDL), 2017 WL 3712916, at *6 (E.D. Tex. Feb. 3, 2017); Land-
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`mark Tech., LLC. v. iRobot Corp., 6:13-cv-00411-JDL, 2014 WL 486836, at *4 (E.D. Tex. Jan.
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`24, 2014) (granting stay, acknowledging that “while a delay in proceedings with its case may be
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`somewhat prejudicial to [non-practicing entity plaintiff], it is not unduly prejudicial”).
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`The cases cited by VoIP-Pal do not suggest otherwise because delay in recovery was not a
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`determining factor. For example, in VideoShare LLC v. Meta Platforms, Inc., this Court held that
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`a stay would cause “minimal undue prejudice” to a plaintiff because it would merely delay a mon-
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`etary recovery. 6:21-cv-00254-ADA, 2022 WL 2718986, at *4 (W.D. Tex. Jul. 12, 2022).3 In
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`Eon Corp., this Court denied a stay because the ex parte reexamination had not been instituted,
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`and the plaintiff made a showing that a multi-year stay could result in the loss of evidence. Eon
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`Corp. IP Holdings v. Skytel Corp., 6:08-cv-00385, 2009 WL 8590963, at *1, *3 (E.D. Tex. Apr.
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`29, 2009).4 Likewise, in USC IP P’ship, L.P. v. Facebook, Inc., the benefits of a stay were
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`3 The Court in VideoShare denied the stay for reasons not applicable here. 2022 WL 2718986,
`at *4-5 (denying stay where the PTO had not issued an office action and where there was no risk
`of claim amendment because the patent had expired). VoIP-Pal’s other cases are equally distin-
`guishable. Affinity Labs of Tex., LLC v. Netflix, Inc., 1:15-cv-849-RP, 2017 U.S. Dist. LEXIS
`5928, at *3 (W.D. Tex. Jan.17, 2017) (denying stay prior to institution of review); Kerr Mach. Co.
`v. Vulcan Indus. Holdings, LLC, 6-20-cv-00200-ADA, 2021 WL 1238932, at *19 (W.D. Tex. Apr.
`7, 2021) (denying stay because the simplification of issues was uncertain).
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`4 Sonrai Memory Ltd. v. LG Elects. Inc. is distinguishable on the same basis. 6:21-cv-00168-
`ADA, 2022 WL 2307475, at *2 (W.D. Tex. Jun. 27, 2022) (denying a stay due to demonstrated
`“risk [of] loss of testimonial and documentary evidence potentially valuable to [plaintiff’s] case”).
`VoIP-Pal has not raised these concerns, nor can it credibly do so because the reexamination is
`almost complete and Amazon has already produced over ten thousand pages of documents.
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`marginal because fact discovery was complete. 6:20-cv-555-ADA, 2021 WL 6201200, at *2
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`(W.D. Tex. Aug. 5, 2021). There are no such reasons to deny a stay in this case.
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`C.
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`Amazon Filed its Motion to Stay at the Appropriate Time.
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`VoIP-Pal asserts that no stay should be entered because Amazon “waited almost nine
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`months” after the ex parte reexamination was instituted. (Opp. at 5.) VoIP-Pal, however, incor-
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`rectly focuses on the date the ex parte reexamination was instituted rather than the date of the non-
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`final office action that rejected all asserted claims. Courts consistently favor motions to stay that,
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`like Amazon’s, are filed shortly after an office action rejecting the claims is issued. For example,
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`in Ramot, the Court denied the defendant’s first motion to stay pending ex parte reexamination
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`(filed shortly after institution) because it was “based solely on speculation of what might possibly
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`happen during reexamination.” Ramot, 2021 WL 121154, at *2. But the Court granted a subse-
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`quent motion to stay filed after the PTO issued a non-final office action because “the reexams have
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`now progressed past the point of speculation.” Id.; compare, e.g., TC Tech., 2021 WL 8083373,
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`at *3-4 (granting stay after all asserted claims rejected in non-final office action) to VideoShare,
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`2022 WL 2718986, at *1, *5 (denying stay requested shortly after institution of ex parte reexami-
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`nation).
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`Here, when the PTO issued its non-final rejection of all claims asserted by VoIP-Pal on
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`April 24, 2023 (Dkt. 100-2 at 1), the Court had already issued a case-dispositive claim construction
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`order (Dkt. 87). Additionally, VoIP-Pal’s motion for reconsideration was already fully briefed.
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`(Dkts. 89, 91, 93.) Under such circumstances, Amazon appropriately waited until after the Court’s
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`June 15, 2023 ruling granting reconsideration (Dkt. 98), and Amazon thereafter promptly filed its
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`motion to stay, which was filed before any schedule was entered in this case.
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`III. CONCLUSION
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`For the foregoing reasons, Amazon’s Motion to Stay should be granted.
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`Case 6:20-cv-00272-ADA Document 102 Filed 07/21/23 Page 8 of 9
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`Dated: July 21, 2023
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`Respectfully submitted,
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`/s/ Daniel T. Shvodian
`M. Craig Tyler, Bar No. 00794762
`Perkins Coie LLP
`500 W 2nd St, Suite 1900
`Austin, TX 78701-4687
`Tel. No. 737.256.6113
`Fax No. 737.256.6300
`
`Daniel T. Shvodian, Admitted Pro Hac Vice
`DShvodian@perkinscoie.com
`Christopher Kelley, Admitted Pro Hac Vice
`CKelley@perkinscoie.com
`PERKINS COIE LLP
`3150 Porter Drive
`Palo Alto, California 94304-1212
`Tel. No. 650.838.4300
`Fax No. 650.838.4350
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`Attorneys for Defendants
`Amazon.com, Inc.; Amazon.com, Services LLC;
`and Amazon Web Services, Inc.
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`Case 6:20-cv-00272-ADA Document 102 Filed 07/21/23 Page 9 of 9
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a true and correct copy of the above and foregoing
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`document has been served July 21, 2023 to all counsel of record, via the Court's CM/ECF system.
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`/s/ Daniel T. Shvodian
`Daniel T. Shvodian
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